The EU issued a Commission Notice in July 2013 stipulating that European grant money could not go to any Israeli institutions operating over the Green Line in the West Bank, Gaza, the Golan Heights, or East Jerusalem, reported +972 Magazine at the time. The Commission guidelines are scheduled to take effect in January 2014.

Noam Sheizaf wrote in the +972 article that “this step caught the Israeli public, media and government by surprise.” Israel’s alarm stemmed largely from the impact of the new guidelines on possible funding for Israeli institutions from the EU’s Horizon 2020 project, a 70 billion Euro “programme [sic] for research and innovation” scheduled to be implemented between 2014 and 2020, according to the project’s website.

On 26 November, however, a deal was reached between Israel and the EU dramatically weakening the effect of these guidelines. The new compromise ensured that Israeli institutions could receive grants and prize money from Horizon 2020 and placed the burden of proof for denying funding to a project on the EU.

If the guidelines were maintained as written, any Israeli organization with projects across the Green Line would be rendered ineligible for grant money or loans from the lucrative research and development program. Speaking with the Jerusalem Post, Professor Ruth Arnon, president of the Israel Academy of Sciences and the Humanities, called the Horizon 2020 program “absolutely essential to the future of science in Israel.”

However, the guidelines left a loophole in the language of the grant funding articles. Instead of applying to “Israeli entities... [which] operate in the territories,” as the article regarding loans and financial instruments states, grants and prizes are forbidden only to “the activities of Israeli entities carried out... in the territories.”

In other words, the Commission left open the availability to Israeli institutions and companies of grants and prize money – which constitute “the vast majority of the funds coming to Israel through various EU programs,” notes the Jerusalem Post – as long as the specific activities funded through the grants were not located within the bounds of the territory seized by Israel in 1967.

Taking advantage of this language, Israeli Justice Minister Tzipi Livni reached a compromise with the European Union on 26 November allowing Israel to join the Horizon 2020 project, ensuring that the proposed 300 million Euros of Horizon 2020 funding planned for Israel will be delivered. Under the terms of the compromise, an appendix will be added stating that Israel rejects the guidelines, and Israeli institutions will be allowed to receive Horizon 2020 grants as long as it is demonstrated that the money is not going to projects over the Green Line.

The terms of the oversight structure that will determine whether Israeli projects meet this requirement are vague, although a different article in +972 Magazine, citing a Hebrew publication in the Israeli newspaper Maariv, says that the responsibility for ensuring that funds are not crossing the Green Line will fall to the EU. “It will be the EU that will need to monitor and find proof that an institution is operating in the occupied territories,” states +972.

This means that almost all Israeli institutions and companies will be able to receive funds from the Horizon 2020 project, despite the EU’s insistence in the text of the guidelines that the Commission aims to “ensure the respect of EU positions and commitments in conformity with international law on the non-recognition by the EU of Israel’s sovereignty over the territories occupied by Israel since June 1967.” The only institutions that won’t be eligible are those whose physical address lies in the West Bank, Gaza, East Jerusalem, or the Golan.

Days before this deal was reached, 114 members of the European Parliament declared in an open letter to Catherine Ashton, EU Foreign Policy Chief, that “the EU must respect its own positions and commitments in conformity with international law... In all cases, no EU-funded support of any kind may be provided to Israeli entities established in Israeli settlements or to settlement-based activities.”

On Monday, 25 November, the day before the compromise was reached making Horizon 2020 funds available to all Israeli institutions except the few headquartered across the Green Line, Ma’an News Agency reported the announcement of 829 new Israeli settlement homes to be constructed in the West Bank. As noted in an October 2013 report from the Israeli NGO Peace Now, settlement construction rose 70% during January-June 2013 in comparison to the same period in 2012.

As +972 quotes one anonymous Israeli official speaking with Maariv, the compromise on the EU guidelines “will allow Israeli institutions 'to march with [the guidelines] but not feel them.’” While the impact of the Commission Notice and the strength of the EU’s anti-settlement position are curbed by this compromise, the construction of the 829 settlement homes reported on 25 November will move forward unhindered.